Second tranche of Bharat-22 ETF to be launched on June 19; government to raise up to Rs 8,400 crore

The Finance Ministry will launch the second tranche of Bharat-22 exchange traded fund (ETF) on June 19.

The Finance Ministry will launch the second tranche of Bharat-22 exchange traded fund (ETF) on June 19 which will help raise up to Rs 8,400 crore from the markets. The issue will open for anchor investors on June 19 and for other institutional and retail investors the next day. The ETF follow-on offer will remain open till June 22. The investors would get a 2.5 per cent discount over the issue price.

“The government is aiming at mopping up Rs 6,000 crore, with a green-shoe option to retain another Rs 2,400 crore from the Bharat-22 ETF follow on offer to be launched on June 19,” a Finance Ministry official said. This offer would also help the government in meeting the minimum public holding norm in PSUs like Coal India. The government had in November last year launched Bharat-22 ETF comprising shares of 22 companies, including public sector undertakings (PSUs), public sector banks, ITC, Axis Bank and L&T. The fund had garnered bids to the tune of Rs 32,000 crore, although the government retained only Rs 14,500 crore.

The state-owned companies or PSUs that are part of the new Bharat ETF-22 include ONGC, IOC, SBI, BPCL, Coal India and Nalco. The other central public sector enterprises on the list are Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL and NLC India. Only three public sector banks — SBI, Indian Bank and Bank of Baroda — figure in the Bharat-22 index. The government plans to raise Rs 80,000 crore in the current fiscal from disinvestment, lower than over Rs 1 lakh crore raised last year. Yesterday through a public notice, the government said it will divest 12 per cent stake in railway consultancy firm RITES through an IPO which will be launched on June 20.

Prior to the launch of Bharat-22 ETF which has a diversified portfolio, the government had floated the CPSE ETF comprising stocks of 10 bluechip PSUs — ONGC, Coal India, IOC, GAIL (India), Oil India, PFC, Bharat Electronics, REC, Engineers India and Container Corporation of India. Through the CPSE ETF, the government had raised Rs 11,500 crore in three tranches — Rs 3,000 crore from the first tranche in March 2014, Rs 6,000 crore from the second tranche in January 2017 and Rs 2,500 crore from the third tranche in March 2017.